AGREEMENT AND PLAN OF REORGANIZATION
OF
PROMO TEL, INC.
THIS AGREEMENT AND PLAN OR REORGANIZATION ("Agreement") is made and entered into
between and among the designated parties as of the latest of the respective
execution dates listed in the execution section below.
RECITALS
WHEREAS, Promo Tel, Inc. is a Nevada corporation ("Promo Tel") presently engaged
in the telecommunications industry through the marketing and distribution of
pre-paid telephone calling cards and other telecommunication products and
services; and
WHEREAS, Promo Tel, Inc. and a group of persons and entities ("Transferor(s)"),
with knowledge, expertise, tangible property, intellectual property, trade
secrets, contractual rights, and interests in ongoing business operations all
involved in or related to the telecommunications industry ("Subject
Properties"), have originated a plan of acquisition and development program for
Promo Tel ("Development Program") under which Promo Tel would acquire the
Subject Properties in exchange for Shares of Promo Tel's Common Stock under the
Agreement in a corporate reorganization ("Reorganization") which would
constitute a nontaxable property exchange under the provisions of Section 351 of
the Internal Revenue Code; and
WHEREAS, as part of the Development Program the Common Stock of Promo Tel will
be registered under the Section 12(g) of the Securities Exchange Act of 1934 and
qualified for trading in the over-the-counter market; and
WHEREAS, Promo Tel and the Transferors desire to enter into the Agreement
pursuant to which the Transferors will transfer and assign to Promo Tel the
Subject Property in exchange for Shares of Promo Tel's Common Stock;
NOW THEREFORE, in consideration of the foregoing and the mutual promises and
convenants set forth herein IT HAS BEEN AND IT HEREBY IS AGREED as follows:
1. Mutual Agreement to Transfer Property and to Issue Stock. Each of the
Transferors hereby agrees to transfer, convey and assign to Promo Tel their
respective interests in the Subject Property as hereinafter identified in
exchange for the specified number of Shares of Promo Tel's Common Stock which
Promo Tel hereby agrees to issue and deliver to the Transferors. The exchange of
the assignments of the Subject Property and the Promo Tel Common Stock shall
take place at the Closing of the Agreement.
2. Identification of Transferors and Interests in Subject Property and
Specification of Promo Tel Common Stock to be Issued. The identification of the
Transferors, a description of their respective interests in the Subject Property
to be conveyed to Promo Tel and the number of Shares of Promo Tel's Common Stock
to be issued to each Transferor is as follows:
A. Transferor ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Transferor ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of Long
Beach, New York will transfer, convey and assign to Promo Tel the Subject
Property described in Exhibit A to the Agreement in exchange for 2,250,000
shares of Promo Tel's Common Stock.
B. Transferor ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. Transferor ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Sr.
will transfer, convey and assign to Promo Tel all right, title and interest in
and to the Subject Property described in Exhibit B to the Agreement and (iv) all
of its right, title and interest in and
to the Subject Property described on exhibit B to the Agreement, all in exchange
for 2,250,000 shares of Promo Tel's Common Stock.
C. Transferor Bayway, Ltd. Transferor Bayway, Ltd. will transfer, convey
and assign to Promo Tel all of its right, title and interest in and to the
Subject Property described in Exhibit C to the Agreement in exchange for
1,750,000 shares of Promo Tel's Common Stock;
D. Transferor CLST, Ltd. Transferor CLST, Ltd. will transfer, convey and
assign to Promo Tel all of its right, title and interest in and to the Subject
Property described in Exhibit C to the Agreement in exchange for 1,750,000
shares of Promo Tel's Common Stock;
E. Transferor ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Transferor ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ will
transfer, convey and assign to Promo Tel all of his rights, title and interest
in and to the Subject Property described in Exhibit C, in exchange for 3,500,000
shares of Promo Tel's Common Stock;
F. Transferor Meylan, Ltd. Transferor Meylan, Ltd. will transfer, convey
and assign to Promo Tel all of its right, title and interest in and to the
Subject Property described in Exhibit C to the Agreement in exchange for
1,750,000 shares of Promo Tel's Common Stock;
G. Transferor ▇▇▇▇ ▇▇▇ ▇▇▇▇▇. Transferor ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ will transfer,
convey and assign to Promo Tel all of her rights, title and interest in and to
the Subject Property described in Exhibit C to the Agreement in exchange for
350,000 shares of Promo Tel's Common Stock;
H. Transferor Public Access Telephone Company, Inc. Transferor Public
Access Telephone Company, Inc. will transfer, convey and assign to Promo Tel all
of the rights, title and interest in and to the Subject Property described in
Exhibit C to the Agreement in exchange for 1,750,000 shares of Promo Tel's
Common Stock;
I. Transferor ▇▇▇▇▇ ▇▇▇▇. Transferor ▇▇▇▇▇ ▇▇▇▇ will transfer, convey and
assign to Promo Tel all of his right, title and interest in and to the Subject
Property described in Exhibit C to the Agreement in exchange for 300,000 shares
of Promo Tel's Common Stock;
J. Transferor ▇▇▇▇ ▇. ▇▇▇▇▇▇. Transferor ▇▇▇▇ ▇. ▇▇▇▇▇▇ will transfer,
convey and assign to Promo Tel all of its right, title and interest in and to
the Subject Property described in Exhibit C to the Agreement in exchange for
150,000 shares of Promo Tel's Common Stock;
K. Transferor Telecorp Holdings, Inc. Transferor Telecorp Holdings, Inc.
will transfer, convey and assign to Promo Tel all of its right, title and
interest in and to the Subject Property described in Exhibit A to the Agreement
in exchange for 2,500,000 shares of Promo Tel's Common Stock;
L. Transferor Total Tech, Ltd. Transferor Total Tech, Ltd. will transfer,
convey, and assign to Promo Tel all of its right, title and interest in and to
the Subject Property described in Exhibit A to the Agreement in exchange for
1,750,000 shares of Promo Tel's Common Stock;
M. Transferor ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Transferor ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ will
transfer, convey and assign to Promo Tel all of its right, title and interest in
and to the Subject Property described in Exhibit C to the Agreement in exchange
for 125,000 shares of Promo Tel's Common Stock.
All of the above described property interests to be acquired by Promo Tel shall
constitute Subject Property as defined herein.
3. General Representation of Transferors. Each of the Transferors hereby
represents and warrants to Promo Tel and each of the other Transferors that: (a)
each Transferor has good and marketable title to the interest(s) in the Subject
Property being conveyed to Promo Tel by that Transferor (b) each Transferor will
convey the above listed interest(s) in the Subject Property to
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Promo Tel free and clear of all encumbrances; (c) each Transferor is the sole
owner of the interest(s) in the Subject Property being conveyed hereunder and no
other person or entity will have an interest in or to the Common Stock of Promo
Tel to be received hereunder; and (d) each Transferor will execute and deliver
to Promo Tel such documentation evidencing the conveyance of the interest(s) in
the Subject Property in such form as counsel for Promo Tel may reasonably
require.
4. General Representation of Promo Tel. Promo Tel hereby represents and warrants
that: (a) it is a Nevada corporation in good standing; (b) it is in the process
of qualifying to do business in the states where its business so requires; (c)
its present authorized capital Stock consists of 100,000,000 Shares of $.001 par
value Common Stock and 1,000,000 Shares of $.001 par value Preferred Stock; (d)
as of the date of the Agreement there are no Shares of its Preferred Stock
outstanding and there are no outstanding options or other rights to acquire any
Shares of Promo Tel's Preferred; (e) as of April 1, 1996 it had outstanding
13,354,249 Shares of its Common Stock and is committed to issue an additional
5,000,000 Shares of Common Stock in conversion of payment of promissory notes
aggregating $500,000 (these notes were issued for $500,000 in cash) at $0.10 per
share; therefor (f) other than as set out in 4(e) there are no outstanding
options or other rights to acquire any Shares of Promo Tel's Common Stock except
for Shares to be issued pursuant to the Agreement; (g) prior to July of 1995
Promo Tel was in a dormant state and since that time it has engaged in active
operations involving the marketing and distribution of prepaid telephone cards
and other telecommunications products and services; (h) during the period from
August 1, 1995 through December 31, 1995 its gross revenues from operations was
approximately $6,800,000; and (i) during the period from August 15, 1995 to
December 31, 1995 it has received $1,000,000 in investment capital, $500,000
from the sale of 5,000,000 Shares of its Common Stock and $500,000 for
promissory notes (which will be converted into 5,000,000 Shares of Common
Stock), substantially all of which has been expended in its operations in its
efforts in the Development Program. Promo Tel further agrees and warrants that
as of the closing date it will not have outstanding any of its capital Stock or
rights to acquire such Stock other than as described in this paragraph 4.
5. Transferors' Investment Representations. Each Transferor hereby acknowledges,
represents and/or agrees that: (a) the Transferor is acquiring all Shares of
Common Stock of Promo Tel to be issued under the Agreement ("Common Stock") for
the Transferor's own account for investment and not with a view to distribution;
(b) the sale or transfer of the Common Stock or any interest therein is severely
restricted; (c) the sale of the Shares of Common Stock hereunder has not been
registered under the Securities Act of 1933 or the securities law of any other
jurisdiction; (d) the Shares of Common Stock cannot be sold or transferred by a
Transferor or any other person or entity unless they are subsequently registered
under applicable laws or an exemption from registration is available; (e) Promo
Tel is not required to register the Shares of Common Stock or to make any
exemption from registration available accordingly, Subscriber must bear the
economic risk of his investment for an indefinite period of time; and (f) Promo
Tel may cause the following legend or one similar thereto to be set forth on
each certificate representing the Common Stock.
"The Shares represented by this Certificate have not been registered under the
Securities Act of 1933 ("Act") and are "restricted securities" as that term is
defined in Rule 144 under the Act. The Shares may not be offered for sale, sold
or otherwise transferred except pursuant to an effective registration statement
under the Act or pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.
6. Promo Tel's Development Program. The Development Program of Promo Tel
includes, (a) the acquisition of the Subject Property from the Transferors under
the Agreement; (b) the expansion of Promo Tel's present activities; (c) the
development of a new business involving the sale of products and service which
will enable the users of personal computers to avail themselves of
communications on the Internet through satellite communications and the
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development of other telecommunication services and products utilizing the
Subject Property; (e) the registration of Promo Tel's Common Stock under Section
12(g) of the Securities Exchange Act of 1934, and the qualification of its
Common Stock for trading in the over-the-counter market. Promo Tel and the
Transferors agree that they will use their best efforts and due diligence to
carry out the Promo Tel Development Program.
7. Speculative Nature of Investment. The Transferors each hereby acknowledge
that they understand that an investment in the Common Stock of Promo Tel is
speculative and subject to a high degree of risk and that they have reviewed the
risk factor involved in the investment including: (a) that the success of the
Promo Tel Development Program is dependent upon Promo Tel's acquisition of
substantial amounts of additional cash to finance its operations of which there
is no assurance; (b) Promo Tel will face significant actual and potential
competition, much of which will be from organizations with established
businesses, reputations and greater capital and personnel resources than Promo
Tel; (c) a substantial portion of the present and proposed business of Promo Tel
is highly volatile in nature and there is no assurance they will be able to
expand or retain their present level of activities; (d) the proposed sale of
products and service to owners of personal computers for communicating on the
Internet Promo Tel will be developing a new business involving new technology
and/or new uses for existing technology and an investment in such a new venture
is inherently speculative; (e) Promo Tel has not conducted or received any
definite study of the potential market acceptance of proposed personal computer
- Internet business, and thus, has no assurance of its market acceptance even if
Promo Tel is successful in its development; (f) the exchange ratios for the
issuance of Promo Tel's Common Stock for the Subject Property has been
determined by negotiations between the Transferors and Promo Tel and were not
based upon any specific recognized criteria or value; (g) it is not now possible
to definitely determine the price at which Promo Tel will be able to raise the
necessary additional working capital for the Development Program. Accordingly, a
Transferor faces a risk of future dilution in the value of the investment as
well as a risk of loss of the Transferred Subject Property if sufficient
additional capital does not become available; and (h) the telecommunications
industry is subject To a substantial degree of government regulation and future
changes in the regulation could adversely affect the operations of Promo Tel.
8. Closing of the Reorganization. The Closing Date shall be such time and date
and the closing shall be held at such place as the parties mutually agree; but
in the absence of such Agreement shall be held at the offices of Promo Tel at
10:00 AM (local time) on April ___, 1996. At the Closing (a) the Transferors
will deliver to Promo Tel all certificates, assignments and other documents
which may be necessary and appropriate to transfer and convey the interest in
the Subject Property as listed in paragraph 2 of the Agreement, all in Form and
substance reasonably satisfactorily to counsel for Promo Tel; and (b) Promo Tel
shall deliver to the Transferors certificates evidencing the Shares of Promo
Tel's Common Stock to be issued to the Transferors pursuant to paragraph 2 of
the Agreement together with such other documents. If any which may be necessary
and appropriate to accomplish the delivery of the Common Stock all in form and
substance reasonable satisfactory to the Transferors or their counsel.
9. Conditions to Promo Tel's Obligations to Close. All obligations of Promo Tel
to be performed at the Closing are subject to the fulfillment, prior to or at
the Closing, of each of the conditions hereinafter set forth in this. Nothing in
this shall limit or restrict any rights or remedies which Promo Tel may have by
reason of any misrepresentation, breach of warranty or non fulfillment of any
convenant. Agreement or obligation by the Transferors under or pursuant to this
Agreement. These conditions to the performance by Promo Tel of its obligations
are.
A. The representations and warranties of the Transferors Agreement or in
writing, certificate, schedule, exhibit, statement, list, report, instrument or
other document furnished or delivered to Promo Tel pursuant to the terms hereof
shall be materially true and correct and as of the Closing as fully as if such
representations and warrants had been made of given at the Closing.
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B. The Transferors of at least the Subject Property listed in sub-paragraphs ▇▇,
▇, ▇, ▇, ▇, ▇, ▇ and L shall be willing and able to complete the transfers of
that Subject Property at the Closing. If any of the other Transferors of the
Subject Property listed in Paragraph 2 is or are not willing and able to
complete the transfer of their Subject Property Promo Tel shall be obligated to
complete the reorganization without the participation of the non-complying
Transferor(s) provided the Reorganization would then still qualify as a
nontaxable exchange under Section 351 of the Internal Revenue Code;
C. The Transferors shall have performed and complied with all covenants and
conditions required by the Agreement to be performed or complied with by them
prior to or at the Closing;
D. Promo Tel shall have received from the Transferors at or prior to the
Closing, all of the certificates, assignments and other documents required to be
delivered pursuant to paragraph 9 hereof;
E. No event shall have occurred prior to the Closing, including without
limitation, loss of or damage to any of the Subject Property which in the
reasonable judgment of Promo Tel, materially and adversely affects the value of
the Subject Property whether or not any such event is covered by insurance;
F. No action or proceeding by any person, entity administrative agency or public
authority shall be pending or threatened against any Part hereto, to restrain,
prohibit or nullify the consummation of the transactions contemplated herein, or
wherein an unfavorable judgment, decree or order would prevent or make unlawful
the fulfillment of this Agreement or performance thereunder; and
G. The Transferors shall have obtained in writing all requisite consents from
third parties with respect to the sale, conveyance, transfer, or assignment of
the Subject Property hereunder.
10. Conditions to the Transferor's Obligations to Close. All obligations of the
Transferors to be performed at the Closing are subject to the fulfillment, prior
to or at the Closing, of each of the conditions hereinafter set forth in this
paragraph 11. Nothing in this paragraph 11 shall limit or restrict any rights or
remedies which the Transferors may have by reason of any misrepresentation,
breach of warrant or non fulfillment of any covenant by Promo Tel under this
Agreement. These conditions or the performance by the Transferors of their
obligations are:
A. The representations and warranties of Promo Tel contained in this Agreement
or in any writing, certificate, schedule, exhibit, statement, list report,
instrument or other document furnished or delivered to ITD or Shareholders
pursuant to the terms of this Agreement shall be true at and as of the Closing
as fully as if such representations and warrants had been made or given at the
Closing;
B. The Transferors of at least the Subject Property listed in sub-paragraphs ▇▇,
▇, ▇, ▇, ▇, ▇, ▇ and L shall be willing and able to complete the transfers of
that Subject Property at the Closing. If any of the other Transferors of the
Subject Property listed in Paragraph 2 is or are not willing and able to
complete the transfer of their Subject Property Promo Tel shall be obligated to
complete the reorganization without the participation or the non-complying
Transferor(s) provided the Reorganization would then still qualify as a
nontaxable exchange under Section 351 of the Internal Revenue Code;
C. Promo Tel shall have performed and complied with Agreements and conditions
required by this Agreement to be performed or complied with by Promo Tel prior
to or at the Closing;
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D. The Transferors shall have received from Promo Tel, at or prior to the
Closing, all of the certificates, instruments and other documents required to be
delivered pursuant to paragraph 9 hereof.
E. The execution and delivery of this Agreement by Promo Tel, and the
performance of its convenants and obligations under it, shall have been duly
authorized by all necessary corporate action;
F. No event shall have occurred prior to the Closing, including, without
limitation, loss of or damage to any of the assets of Promo Tel which, in the
reasonable judgment the Transferors, materially and adversely affects the value
of Promo Tel and or the business thereof, whether or not such event is covered
by insurance; and
G. No action or proceeding by any person, entity, administrative agency or
public authority shall be pending or threatened against any Part hereto, to
restrain, prohibit or nullify the consummation of the transactions contemplated
herein, or wherein an unfavorable judgment, decree or order would prevent or
make unlawful the fulfillment of this Agreement or performance hereunder.
11. Mutual Indemnification. The parties agree that the following mutual
indemnification provision shall apply:
A. The Transferors shall jointly severally, defend, indemnity and hold Prom Tel
harmless from, against and in respect of any and all claims, demands, lawsuits,
proceeding, losses, assessments, fines, penalties, administrative orders,
obligations, costs, expenses, liabilities and damages, including interest,
penalties and reasonable attorney's fees (all of the foregoing hereinafter
referred to collectively as the ("Claims"), which arise or result from related
to the Transferors breach of, or failure to perform, any of their
representations, warranties, covenants, commitments Agreements or obligations
under this Agreement or in any writing, certificate, exhibit, schedule,
statement, list, report, instrument, or other document furnished or delivered to
Promo Tel in connection with this Agreement (including, without limitation, any
misrepresentation in, or omission from, this Agreement or any writing,
certificate, exhibit, schedule, statement, list report to Promo Tel in
connection with this Agreement; and
B. Promo Tel shall jointly severally, defend, indemnify and hold Prom Tel
harmless from, against and in respect of any and all claims, demands, lawsuits,
proceeding, losses, assessments, fines, penalties, administrative orders,
obligations, costs, expenses, liabilities and damages, including interest,
penalties and reasonable attorney's fees (all of the foregoing hereinafter
referred to collectively as the ("Claims"), which arise or result from related
to the Transferors breach of, or failure to perform, any of their
representations, warranties, covenants, commitments Agreements or obligations
under this Agreement or in any writing, certificate, exhibit, schedule,
statement, list, report, instrument, or other document furnished or delivered to
Promo Tel in connection with this Agreement (including, without limitation, any
misrepresentation in, or omission from, this Agreement or any writing,
certificate, exhibit, schedule, statement, list report to Promo Tel in
connection with this Agreement; and
12. Arbitration Promo Tel and each of the Transferor agree to provide the other
with written notice of any claimed breach of the Agreement. The party receiving
the notice of alleged breach shall have five days to cure the breach. If after
the 30 days no resolution has been achieved the involved parties shall arbitrate
the dispute utilizing the services and Rules and Regulation of the American
Arbitrator Association.
13. Execution. The Agreement may be executed in counter parts and each or such
counterparts have for all purposes be deemed to be an original altogether only
one (1) Agreement. The Effective date hereof shall be the date of the last
necessary signature hereto.
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14. Notices. All notices required to be given thereunder relating to the
Agreement shall be in writing and shall be deemed to have been duly given on the
date of receipt if sent by overnight delivery to the Part to whom notice is to
be given, and property addressed, to the other parties at the address set forth
opposite their execution of the Agreement below. Any Party may at any time
direct in writing that all communications or particular communications or
particular types of communications be delivered to a different address or
addressee other than those specified herein by notifying the other Parties in
the manner prescribed herein for the giving of notice.
15. Assignment. This Agreement shall inure to the benefit of and be binding on
the Transferors. Promo Tel and their respective successors, assigns, legal
representatives and heirs. This Agreement shall not be assigned by any
Transferor without the prior written consent of Promo Tel. Any attempted
assignment without such consent shall be void.
16. Entirety and Amendments. The Agreement constitutes the entire contract.
Agreement and understanding of the parties. The Agreement may only be amended in
writing executed by the parties.
17. Law. The Agreement shall be governed by and construed under the laws of
Colorado.
18. Taxation. It is the intent and understanding of the parties that the
transaction will constitute a "nontaxable exchange of property" under the
provisions of Section 351 of the Internal Revenue Code. Promo Tel and the
Transferors agree to each take such action as reasonably necessary to carry out
this understanding.
In witness whereof, the parties to the Agreement have duly executed it as of the
respective dates set forth below.
Dated: April 22, 1996 Promo Tel, Inc.
Address:
Promo Tel, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ -----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Dated: April___,1996 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: April 22,1996 ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇.
Address:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ Engineering By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Dated: April _____,1996 Bayway, Ltd.
Address:
▇▇▇▇▇▇▇ Dell
Bayway, Ltd. By: /s/ ▇▇▇▇▇▇▇ Dell
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Dell
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14. Notices. All notices required to be given thereunder relating to the
Agreement shall be in writing and shall be deemed to have been duly given on the
date of receipt if sent by overnight delivery to the Part to whom notice is to
be given, and property addressed, to the other parties at the address set forth
opposite their execution of the Agreement below. Any Party may at any time
direct in writing that all communications or particular communications or
particular types of communications be delivered to a different address or
addressee other than those specified herein by notifying the other Parties in
the manner prescribed herein for the giving of notice.
15. Assignment. This Agreement shall inure to the benefit of and be binding on
the Transferors. Promo Tel and their respective successors, assigns, legal
representatives and heirs. This Agreement shall not be assigned by any
Transferor without the prior written consent of Promo Tel. Any attempted
assignment without such consent shall be void.
16. Entirety and Amendments. The Agreement constitutes the entire contract.
Agreement and understanding of the parties. The Agreement may only be amended in
writing executed by the parties.
17. Law. The Agreement shall be governed by and construed under the laws of
Colorado.
18. Taxation. It is the intent and understanding of the parties that the
transaction will constitute a "nontaxable exchange of property" under the
provisions of Section 351 of the Internal Revenue Code. Promo Tel and the
Transferors agree to each take such action as reasonably necessary to carry out
this understanding.
In witness whereof, the parties to the Agreement have duly executed it as of the
respective dates set forth below.
Dated: April 22, 1996 Promo Tel, Inc.
Address:
Promo Tel, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ -----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Dated: April 22, 1996 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: April 22,1996 ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇.
Address:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ Engineering By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Dated: April 22, 1996 Bayway, Ltd.
Address:
▇▇▇▇▇▇▇ Dell
Bayway, Ltd. By: /s/ ▇▇▇▇▇▇▇ Dell
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Dell
7
Dated: April 22, 1996 CLST, Ltd.
Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
C/O Promo Tel, Inc. By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CLST, Ltd. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: April 22, 1996 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated: April 23, 1996 Meylan, Ltd.
Address:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Meylan. Ltd. By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
C/O Promo Tel, Inc. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: April 23, 1996 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Dated: April 22, 1996 Public Access Telephone Company,
Address: Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Public Access Telephone Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ By:
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Dated: April 22, 1996 ▇▇▇▇▇ ▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
8
Dated: April 22, 1996 CLST, Ltd.
Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
C/O Promo Tel, Inc. By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CLST, Ltd. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: April 22, 1996 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated: April 23, 1996 Meylan, Ltd.
Address:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Meylan. Ltd. By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
C/O Promo Tel, Inc. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: April 23, 1996 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Dated: April 22,1996 Public Access Telephone Company,
Address: Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Public Access Telephone Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ By:
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Dated: April 22, 1996 ▇▇▇▇▇ ▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇
Promo Tel, Inc. By: /s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
8
Dated: April 22, 1996 Telecorp Holdings, Inc.
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecorp Holdings, Inc. By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
C/O Promo Tel, Inc. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: April 23, 1996 Total Tech, Ltd.
Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Total Tech, Ltd. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
C/O Promo Tel, Inc. -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
9
EXHIBIT A
TO
AGREEMENT AND PLAN OF REORGANIZATION
OF
PROMOTEL, INC.
SUBJECT: PROPERTY OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, TELECORP FUNDING, INC.
AND TOTAL TECH LTD.
The Subject Property to be conveyed to PromoTel, Inc. pursuant to the
Agreement under subparagraphs 2A, K and L by Transferors ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Telecorp Holdings, Inc. and Total Tech, Ltd. shall consist of all of his right,
title, and interest in and to the intellectual and intangible properties
described below, including without limitation, all customers, data bases,
concepts, idea, trade secrets, designs, drawings, copyrights, (and/or rights to
apply therefore), research data and any other documentation relating to the
following electronic and telecommunication devices projects and concepts; and
Transferor hereby relinquishes and grants to PromoTel, Inc. any and all
rights, title or interest that Transferor may have, may possess, or may become
legally entitled to in the property hereinbelow described and assigned by
Transferor to PromoTel, Inc. Transferor warrants and specifies that it has all
rights title and interest in the property hereinbelow described, and that the
transfer thereof to PromoTel violates no federal, state, or other laws, but that
the property belongs exclusively and solely to Transferor. Transferor agrees to
hold PromoTel, Inc. harmless and free and clear of any and all legal attacks
upon the property assigned by Transferor to PromoTel as hereinbelow described.
a. trade secrets, knowledge, customer bases, data bases, contacts and
sales programs for the sale of long distance prepaid telephone debit
cards; and
b. trade secrets, knowledge, customer bases, data bases, contacts and
sales programs for the sale of other products in the
telecommunications industry
The above list is complete and accurate.
Dated: April 22, 1996 /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: April 22, 1996 /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Telecorp Holdings, Inc.
Dated: April 23, 1996 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Total Tech Ltd.
10
EXHIBIT B
TO
AGREEMENT AND PLAN OF REORGANIZATION
OF
PROMOTEL, INC.
SUBJECT: PROPERTY OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
The Subject Property to be conveyed to PromoTel, Inc. pursuant to the
Agreement under subparagraph 2.8 by Transferor ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., shall
consist of all of his right, title, and interest in and to the intellectual and
intangible properties described below, including without limitation, all
concepts, idea, trade secrets, designs, drawings, copyrights, patented materials
(and/or rights to apply therefore), research data and any other documentation
relating to the following electronic and telecommunication devices projects and
concepts:
Transferor hereby relinquishes and grants to PromoTel, Inc. any and all
rights, title or interest that Transferor may have, may possess, or may become
legally entitled to in the property hereinbelow described and assigned by
Transferor to PromoTel, Inc. Transferor warrants and specifies that it has all
rights title and interest in the property hereinbelow described, and that the
transfer thereof to PromoTel violates no federal, state, or other laws, but that
the property belongs exclusively and solely to Transferor. Transferor agrees to
hold PromoTel, Inc. harmless and free and clear of any and all legal attacks
upon the property assigned by Transferor to PromoTel as hereinbelow described:
a. Internet Tunneling and Alternate Routing for Third Party Destination
Information
b. Alternate routing and Internet Origination and Termination of
Primary Call
c. Alternate routing for Multimedia to Third Party Destination
d. Alternate routing for Multimedia Organization and Termination of
Primary Information Requests
e. Transmitting Packet Data-TCP/IP for Internet Alternate Routing to
Satellite Uplink
f. Design for Satellite Use of Transponder Internet Services
g. Design for Internet Services Via Alternate Sources to ▇▇▇▇▇▇ Turbo
Internet
h. Design for ▇▇▇▇▇▇ Network Gateway Servers as Tunneling Servers for
Uplink
i. Compression of TCP/IP Packet Internet Services for Uplink Loading on
Galaxy 4 Transponder
j. Redesign of ▇▇▇▇▇▇ Network Services, DirecPC Primary Installation
Software
k. Redesign of Auto Install for DirecPC Software and Windows 3.1
l. Redesign of Auto Install for DirecPC Software and Windows 3.11
m. Redesign of Auto Install for DirecPC Software and Windows 95
n. Redesign Application of DirecPC Software
o. Redesign Application of DirecPC NDIS Driver for Windows
p. National Internet Service for Applications to Universities and
Educational Facilities
q. National Internet Service for 1-800 Access
r. National Internet Services for Local Access
The above list is complete and accurate
Date: April 23, 1996 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------------------
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇.
11
EXHIBIT C
TO
AGREEMENT AND PLAN OF REORGANIZATION
OF
PROMOTEL, INC.
The Subject Property to be conveyed to Promo Tel, Inc. pursuant to the
Agreement under subparagraph 2 C, D, E, F, G. I, J and M shall consist of all of
their right, title and interest in and to the intellectual and intangible
properties described below, including without limitation, all concepts, idea,
trade secrets, designs, drawings, copyrights, (and/or rights to apply
therefore), research data and any other documentation relating to the following
electronic and telecommunication devices projects and concepts; and
Transferor hereby relinquishes and grants to PromoTel, Inc. any and all
rights, title or interest that Transferor may have, may possess, or may become
legally entitled to in the property hereinbelow described and assigned by
Transferor to PromoTel, Inc. transferor warrants and specifies that it has all
rights, title and interest in the property hereinbelow described, and that the
transfer thereof to PromoTel violates no federal, state or other laws, but that
the property belongs exclusively and solely to Transferor. Transferor agrees to
hold PromoTel, Inc. harmless and free and clear of any and all legal attacks
upon the property assigned by Transferor to Promo as hereinbelow described:
Trade secrets, knowledge, customer bases, data bases, contacts and sales
programs for:
a.) sale of long distance services - switched and dedicated and/or
b.) sale of 800 services - switched and dedicated and/or
c.) sale of prepaid telephone card products and/or
d.) distribution of prepaid telephone cards through wholesale channels
and/or
e.) sale of carrier services and/or
f.) distribution of telecommunications products through network marketing
programs and/or
g.) sale of alternate access - local loop bypass and/or
h.) sale of interactive voice response products and/or
i.) sale of satellite uplink/downlink products for international
origination and termination and/or
j.) sale of promotional telecommunications products and/or
k.) sale of printing and graphic services for telephone card products
and/or
l.) marketing campaigns for telecommunications hardware and software
and/or
m.) public relation and marketing campaigns for telecommunications
companies and/or
n.) investment banking for telecommunications companies and/or
o.) corporate financing for telecommunications companies and/or
p.) developing business plans and strategies for telecommunications
companies and/or
q.) filing federal and state tariffs for telecommunications services
The above list is complete and accurate.
Dated: April 23, 1996 /s/ ▇▇▇▇▇▇▇ Dell
----------------------------------
Bayway Ltd.
Dated: April ____, 1996 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
CLIST, Ltd.
12
Dated: April 22, 1996 /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated: April 23, 1996 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Meylan, Ltd.
Dated: April 23, 1996 /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇
Dated: April 22, 1996 /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇
Dated: April __, 1996
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Dated: April ___, 1996
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
13
MUTUAL RELEASE
THIS MUTUAL RELEASE between and among DigiTEC 2000, Inc., a Nevada
Corporation formerly known as PromoTEL, Inc. ("DigiTEC") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇") (the business address of DigiTEC and ▇▇▇▇▇▇▇▇ is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10110) and "ROA" a New Jersey Corporation and ▇▇▇▇
▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") (The business address of ROA and ▇▇▇▇▇▇ is ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ 07853) has been executed by them on the dates
set forth below opposite their signatures and becomes effective on the latest
such execution date.
RECITALS
WHEREAS, ▇▇▇▇▇▇ was formerly associated with DigiTEC as an officer and
director and during that association contemplated transferring certain assets to
DigiTEC for stock and/or options to purchase stock, and
WHEREAS, the contemplated asset transfer by ▇▇▇▇▇▇ was not and is not to
be concluded, and
WHEREAS, the associates between ▇▇▇▇▇▇ and DigiTEC has been terminated and
parties have agreed to mutually release each other from any and all claims or
liabilities between themselves;
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants contained herein, IT HAS BEEN AND IT HEREBY IS AGREED as follows:
1. DigiTEC and ▇▇▇▇▇▇▇▇ hereby, individually and jointly release and
relinquish any and all claims, rights and choses in action, now known or
unknown, which they have or may have against ▇▇▇▇▇▇ and/or ROA, including. but
without 1imitation of this Release, any such claims, rights or choses in action
relating to the proposed transfer of assets by ▇▇▇▇▇▇ to DigiTEC set forth
above.
2. ▇▇▇▇▇▇ and ROA hereby release and relinquish any and all claims,
individually and jointly release and relinquish any and all claims, rights and
choses in action, now known or unknown, which they have or may have against
DigiTEC and/or ▇▇▇▇▇▇▇▇, including, but without limitation of this Release, any
such claims, rights or choses in action relating to the proposed transfer of
assets by ▇▇▇▇▇▇ to DigiTEC set forth above.
3. DigiTEC agrees that it will not issue or file with the Internal Revenue
Service any form 1099 indicating that ▇▇▇▇▇▇ or ▇▇▇ received any income from
DigiTEC for any stock, stock options, or similar items. DigiTEC further agrees
to defend or indemnify ▇▇▇▇▇▇ or ROA from any additional income taxes assessed
against either of them for any stock, stock options, or similar items from
DigiTEC, including any professional fees paid to contest such additional
taxation assessment.
4. ▇▇▇▇▇▇ and ▇▇▇ consent and agree that DigiTEC may cancel and void any
stock certificate or stock option which may have been prepared in contemplation
of the completion of the proposed asset transfer from ▇▇▇▇▇▇ to DigiTEC
5. This release shall be binding upon the parties hereto, their assigns,
heirs or legal representatives.
IN WITNESS WHEREOF, this Release has been executed by the parties (in the
case of the corporate parties by their duly authorized officers) on the dates
set forth below.
DigiTEC 2000, Inc.
Dated December 13, 1996 By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Dated December 13, 1996 By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Individually
ROA
Dated December 13, 1996 By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Dated December 13, 1996 By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Individually
AMENDMENT
TO
AGREEMENT AND PLAN OF REORGANIZATION
OF
PROMOTEL, INC.
THIS AMENDMENT to the Agreement and Plan of Reorganization between
PromoTel, Inc. ("PromoTel") and the other parties designated as "Transferor(s)"
therein (PromoTel and the Transferors are hereinafter the "Parties") dated April
23, 1996 (which agreement as originally executed is hereinafter referred to as
the "Original Agreement" and as modified by this amendment is hereinafter
referred to as the "Amended Agreement") is hereby amended and modified as set
forth below pursuant to the consent and agreement of the parties evidenced by
their execution hereof.
RECITALS
WHEREAS, under the Original Agreement the Transferors conveyed and
assigned to PromoTel the Subject Property for which the Transferors were to
receive the respective numbers of shares of the Common Stock of PromoTel
specified therein in a transaction designed to constitute a non-taxable exchange
under Section 351 of the Internal Revenue Code; and
WHEREAS, the Parties have been advised that if the transaction is
completed as provided in the Original Agreement PromoTel and/or certain of the
Transferors will or may incur material detrimental accounting and/or financial
consequences; and
WHEREAS, the Parties desire to enter into this Amendment to the Agreement
to modify the consideration to be given to the Transferors by PromoTel in
exchange for the Subject Property:
NOW THEREFORE, in consideration of the foregoing, the mutual promises and
covenants contained herein and the execution hereof by the respective Parties,
IT HAS BEEN AND IT HEREBY IS AGREED as follows:
1. Designation of Group A Transferors. Transferors Bayway, Ltd., CLST,
Ltd., Meylan, Ltd., Public Access Telephone Company, Inc., Telecorp Holdings,
Inc., and Total Tech, Ltd. are hereby designated as the "Group A Transferor(s)".
2. Designation of Group B Transferors. Transferors ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are hereby designed as the "Group B
Transferor(s)".
3. Change of Consideration to Transferors. It is agreed that instead of
receiving shares of the Common Stock of PromoTel as specified in the Original
Agreement, the Transferors shall receive options to purchase shares of the
Common Stock of PromoTel as follows; Transferors shall receive an option to
purchase one and one-quarter shares for each share they would have received
under the Original Agreement.
4. Options. The options to be issued to the Group A Transferors shall have
an exercise price of $.25 per share and those to be issued to the Group B
Transferors shall have an exercise price of $2.20 per share (110% of the market
value of the shares on April 23, 1996.) Except for the exercise price and the
registration rights set forth in Paragraph 5 below, all options to be issued to
the Transferors shall be issued on the same terms and conditions which are as
follows: (a) the options shall be for a term of five years commencing April 23,
1996; (b) the options may be exercised in whole or in part during their term;
(c) the options are callable by PromoTel upon 30 days written notice at a call
price of $.10 for each option to purchase one share of PromoTels common stock;
(d) both the options and the shares to be issued thereunder upon exercise shall
be acquired as "restricted securities" under the Securities Act of 1933 and
subject to the Transferors' investment representations set forth in Paragraph 5
of the Original Agreement; (e) the options shall contain the usual and customary
anti-dilution provisions; (f) all references in the Amended Agreement to the
Common Stock of PromoTel are to such as of April 23, 1996; and (g) the form of
options, the number of shares covered thereby and these exercise prices which
are issued and delivered to the Transferors shall be adjusted to reflect any
recapitalization of PromoTel which may have occurred since April 23, 1996.
5. Registration Rights. The Parties agree that the options to purchase
shares of Common Stock of PromoTel to be issued to the Transferors shall contain
the appropriate and customary language granting to the Transferors rights to the
registration of the sale of the Common Stock underlying the options under the
Securities Act of 1933, as amended ("1933 Act"), as follows:
A. Group A Transferors. At any time after October 23, 1997, the holders of
the options to purchase a majority of the shares underlying the options issued
to the Group A Transferors and/or shares already purchased pursuant thereto
shall have a one-time right to demand that PromoTel file an appropriate
Registration Statement with the Securities and Exchange Commission under the
1933 Act with respect to the sale of the shares underlying the options issued to
the Group A Transferors at PromoTel's cost and expense; and
B. Group B Transferors. PromoTel agrees that once its Common Stock has
been registered under Section 12(g) of the Securities Exchange Act of 1934, it
will file a
Registration Statement on the appropriate form with the Securities and Exchange
Commission to register the sale of the shares of the Common Stock of PromoTel
underlying the options to be issued to the Group B Transferors and to keep such
Registration Statement effective as long as reasonably necessary.
6. Taxation Reimbursement. PromoTel agrees that it will be responsible to
pay or to reimburse the Transferors for the amount of their respective income
tax liability, if any, for accepting the options under the Amended Agreement
instead of the shares of common stock under the original agreement.
7. Status of Origina1 Agreement. Except as changed or modified herein and
with this deletion of Paragraph 18 thereof, the Original Agreement remains in
full force and effect.
8. Cooperation. The Parties hereby agree to cooperate fully with each
other to complete the actions necessary to enable PromoTel to issue and deliver
to the Transferors the stock options provided for herein, including the return
by the Transferors to PromoTel any stock certificates which may have been issued
under the Original Agreement.
IN WITNESS WHEREOF, the Parties to the Amended Agreement have duly executed it
as of the respective dates set forth below.
Dated: December 15, 1996. PromoTel, Inc.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
Dated: December 15, 1996. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Dated: December 15, 1996. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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